2010 (2) TMI 1033 - AT - Central Excise

Summary

Issues:
Admissibility of Cenvat credit on capital goods when rectification of mistake was passed by Income tax Authorities revising depreciation.

Analysis:
The appeal centered around whether Cenvat credit on capital goods is permissible when the Income tax Authorities rectify depreciation on the same goods. The appellant was initially unable to present the rectification order before the Adjudicating Authority but later submitted it during the appeal. The authority confirmed that no double claim was made by the appellant to different taxing authorities. Rule 4(4) of Cenvat Credit Rules, 2004 prohibits claiming credit on depreciable capital goods if depreciation is already claimed. However, the rectification order allowed the appellant to claim credit on the capital goods. The Appellate Authority thoroughly considered the claim and found no reason to deny it, especially since the Revenue failed to provide evidence contradicting the Commissioner's decision.

Analysis Continued:
The absence of the Respondents during the proceedings did not hinder the decision-making process. The learned DR relied on previous Tribunal decisions to argue against double claims, but the Commissioner (Appeals) referenced a specific judgment that supported the appellant's position. The Revenue's reliance on decisions from Single Member Benches was deemed misplaced as they did not consider a crucial Division Bench ruling that clarified the application of Cenvat Rules in cases of rectification of mistakes by Income tax Authorities. As no evidence was presented by the Revenue to challenge the first appeal order, the dismissal of their appeal was justified based on the lack of errors or perversity in the initial decision.

Conclusion:
The judgment ultimately upheld the appellant's right to claim Cenvat credit on capital goods following a rectification order by the Income tax Authorities, as long as no double claims were made to different authorities. The decision highlighted the importance of specific provisions under both the Income tax Act, 1961, and the Cenvat Credit Rules, 2004, in determining the admissibility of such credits. The dismissal of the Revenue's appeal was based on the failure to provide substantial evidence to challenge the initial decision, which was found to be in accordance with the relevant legal framework and precedents.